A new formula for allocating resources to the 15 health boards in Scotland will be 'the most advanced approach to health resource allocation anywhere in the UK', according to Scottish health minister Susan Deacon.
The formula, now out for four months' consultation, is likely to replace the 20-year-old SHARE system and, largely mirroring the English system, will cover budgets for GP prescribing and primary care as well as hospital and community health spending.
It has been devised following an 18month review by a steering group chaired by Professor Sir John Arbuthnott, principal and vice-chancellor of Strathclyde University, and will cover 80 per cent of the NHS in Scotland's total annual budget.
At present, SHARE covers 61 per cent of the health budget, and is calculated on the basis of each health board's size and the nature of the population, ranging from greater Glasgow with 905,000 people to Orkney with just 19,000.
Under SHARE, one indicator of ill health - the death rate for people under 65 - was used as a general indicator of relative morbidity. So boards with a higher than average death rate were considered to have greater morbidity than those below average.
The new formula contains four key elements (see box), but has identified 50 further indicators of ill health.
These include:
the number of adults reporting permanent sickness in the census;
the number of lone-parent households;
unemployment;
the rate of owner occupation;
ethnicity;
remoteness of the community.
Under the English system, resource allocation - based on work undertaken at York University - covers hospital and community health services, GP prescribing and general medical services infrastructure by bringing together three separate formu las .
But work is currently under way to develop a single formula, in line with the Scottish approach.
In England, the population of each health authority is weighted according to age - but not gender as in the new Scottish proposals - and adjusted for need and cost to reflect market forces.
There are variants for acute, community and mental health services.
For acute services, variables include limiting long-standing illness, standardised mortality rates, unemployment, the proportion of pensioners living alone and the proportion of dependants in single-carer households.
The formula for prescribing includes variables for permanent sickness, households with no carer and babies aged under one year.
In the Scottish formula, the final element is an adjustment to reflect the extra costs of delivering healthcare in some of the remotest parts of Europe.
SHARE had a sparsity index based on the distance patients lived from their GP. But the new formula proposes a more comprehensive remoteness adjustment which will apply to community, GP and hospital services.
The adjustment reflects the extra time it takes to deliver healthcare - for example, because a district nurse will need to travel round a larger area, and the skills that rural nurses need to deliver a more flexible and comprehensive service.
Remote areas - for example, an island community separate from the nearest GP - may need a multi-skilled resident nurse who can deal with a range of emergency medical procedures, and this represents an extra cost to the health board.
The proposed formula applies remoteness adjustments to each hospital care programme - acute, mental illness, care of elderly people and so on - reflecting the fact that services cost more to deliver in areas where hospitals are much smaller. There is also less opportunity to use day surgery because of the greater distances patients have to travel.
The formula in England, by contrast, does not deal comprehensively with rurality, despite the comparative remoteness, for example, of parts of Northumbria, Cumbria, North Yorkshire and Cornwall.
The effect of the proposed formula on the allocation of resources will be radical. At one extreme, Western Isles gets 7.2 per cent less than it should, according to its assessed needs, while Lothian gets 4.5 per cent -£26.9m - more.
A spokesperson for Lothian health board says it supports a Scotlandwide approach to addressing health inequality but wants further time to study the proposals.
The report itself stresses that a more equitable distribution of funds will take about six years to achieve and that moves to parity should avoid reducing any board's allocations.
Rather, it suggests, above-parity boards should be given smaller rates of growth.
Ms Deacon argues that the new proposals will be fair to people living in every part of Scotland and will end 'the tyranny of distance' for those living in remote and rural communities.
She also says the government will guarantee above-inflation increases in health spending for the lifetime of this Scottish Parliament, with at least£1,000 a year spent per man, woman and child by 2000-01.
Fair Shares for All: national review of resource allocation in the NHS.
www.Scotland.gov.uk
Size does matter: the new calculations The new Scottish formula has four key elements:
an adjustment for the size of each board's population;
an adjustment to account for the age and gender of the population;
an adjustment to reflect needs arising from morbidity and life circumstances, including deprivation, poverty and ethnicity;
an adjustment to reflect the extra costs of delivering healthcare in rural and remote areas.
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